Some related-party transactions not disclosed inadvertently: Kaynes Tech

Shares of Kayne Technologies plummeted over 12 per cent on Friday after the firm said it had “inadvertently not disclosed” some of the related-party transactions in the standalone financial statements of the company.

 

The company, however, said that these transactions were not required to be disclosed under the consolidated accounting standards as per the Indian Accounting Standards. 

Earlier this week, Kotak Institutional Equities flagged in a report inconsistencies in the company’s related party transactions, an ambiguous accounting treatment of goodwill or reserve adjustments under acquisitions, and sharp additions to intangibles for technical know-how, among other issues at the company.

 

“We have observed inconsistencies in the disclosures made by the standalone entity and various subsidiaries on inter-company related transactions for the year and in year-end balances,” Kotak Institutional Equities said in its report.

 

The related party transactions flagged by Kotak Institutional Equities include the purchase of ₹180 crore from Kaynes Electronics Manufacturing in 2024-25, year-end payables of ₹320 crore to Kaynes Technology, and receivables of ₹190 crore from the company.

 

Kaynes Technologies, one of the 10 companies setting up a new semiconductor unit in India under the India Semiconductor Mission, had in July announced plans to open a new electronics manufacturing facility in Bhopal for an investment of ₹352 crore.

 

The plant's commercial production is expected to start in 2026, with nearly 1,000 jobs for highly-skilled workers likely to be created.

 

At the Bhopal plant, Kaynes is expected to make products in automotive, aerospace, defence, medical, industrial, internet-of-things, and outer space. It would be using new surface-mount-technology and high precision electronic assembly lines.